The year of 2006. The half-destroyed national housing and communal economy is still alive. It functions, though controls only the cleanness of the refuse bins. The volume of refuse increases year by year.

Amount of gas and water supply to population over last period








Per capita gas consumption

Network gas, cu m









In city








In village








Natural gas, in kg









In city








In village








Water, per liter









In city








In village








Source: State Statistics Committee

So few people will not have complains on dwelling conditions, to be more exact, the quality of services rendered by the HCE. The amortization services actually do not exist today. However, the HCE at definite bribe permit the rebuilding or expansion of apartment through additional balconies, which damages the firmness of the building.

At present the HCE renders two types of services: collection of payments for amortization services and exploitation of buildings and delivery of return bins. Indeed, following rise in diesel fuel the cars came for return bins every other day, finding it as a way of compensation. Obviously, the functioning of HCEs now is less efficiently system.

The action by the government shows it has no exact strategy on cardinal reforming of the HCEs and changing it to an effectively functioning mechanism. Even an only way for establishment of effective functioning of the communal sector the development of market relationships through attracting private investors, restricted itself on transition of the electricity distribution network to the a management of the Turkish company Barmek.

The HCE has also complains. They are dissatisfied with the law tariffs of the community services. The population pays for services at tariffs set by the Cabinet of Ministers, which are considerably lower than its direct cost. It is necessary to note that devices and materials needed for the HCE are purchased at prices, which considerably exceed the amount of collection from the population. As a result, the HCE works in loss.

Incompliance in the tariffs for communal services to expenses of the HCEs are result of a painful problem tough social condition of the overwhelming part of the population.

It is good that privileged system for payment of communal services were rejected in 2001. The privileges were replaced with money compensation. It actually promoted rational consumption of services.

Logically we come to an opinion that at the moment the government would hardly have serious alternative to survive from the situation but gradual rise in tariffs, that we observe over the period. It will more probably lead to strengthening of non-payments, as it was in case with Azerigas. Furthermore it could entail social dissatisfaction. It could be a decisive factor preventing the government from reforming the HCE.

Starting from 1995 the number of employees in this sector increases steadily, which consequently leads to rise in expenses for labor payment. However, one can expect cut in the HCE employees, as many communal services are rendered by definite organization (electricity-, gas-, water supply). Respectively. These organizations undertake all exploitation expenses on the their part of infrastructure and also receive incomes and profits from the services rendered.

Moreover, it was revealed that expenses of the HCE are high due to inefficient use of public funds. The same time practice shows that management of this sphere by other renters, or manager, in most cases by foreigners, do end ideally always. The investigation carried out by the Prosecutor Generals Office into the exaggeration of figures, wrong development of financial accounts, and use of additional expenses by the company is nearing to end.

The finance minister noted the existence of many problems in the activities of Barmek from the economic viewpoint and untargeted inefficient investments by the company

The Finances Ministry has submitted the results of investigation targeting the analysis of the activities of Barmek-Azerbaijan, an energy distributor, to relevant bodies.

Thus, in this stage it is necessary to carry out full analysis of the situation in the HCE starting from the technical state to the quality of book-keeping and financial control with definition of proper optimal structure of expenses and respectively real direct price of HCE services. All directions of financial flows, as well as black holes the funds disappear, can be revealed in this sector of economy in this way.

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